Agriculture Committee on Nov. 27th, 2014

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Yeah, absolutely.

I just wanted to speak to that amount of money. To me, I just think it refutes a lot of claims that we're cutting back on investment and research. It's quite the opposite.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Yes, not at all.... The whole premise of Growing Forward 2 was more money and investment in innovation, competition, and marketing. Our farmers have proven they can grow it. There's still a robust series of business risk management suites. We made some changes to AgriStability. At the same time we increased the capacity of crop insurance and we increased by having livestock insurance available to the provinces across the country. What that does is bring bankability and predictability to that business risk suite as well as the investments on the innovation side. A growing number of farmers have recognized that's where the future is. They have to be competitive. They have to be innovative. Certainly, they've proven that they are and we'll partner with them anytime to continue to build along that line.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Zimmer.

We'll go to our last, Mr. Payne, please for five minutes.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Chair.

Thank you, Minister, for coming today.

I've been talking to a lot of my farmers and ranchers, and certainly I want to thank you, Minister Fast, and the Prime Minister for all of the work you've done on the CETA agreement. I think it's a huge benefit for our country, opening up a huge market—500 million people, as I understand.

As you're aware, our committee undertook a study on this agreement and reported back to the House. I think we had some very positive comments from many of the stakeholders that were here. Over the next couple of days in our meetings, we're actually going to review this again. Unfortunately, the NDP oppose this deal despite hog, cattle, grains, oilseeds, and horticultural farmers and processors throughout Canada benefiting from this massive EU market that is being opened up for our agricultural sector.

I would like you to speak on this. There is money in the estimates for market development for those products in Europe. Can you comment on the opposition NDP on free trade with Europe?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

I'll let the last one go because it's well documented. It sort of goes down in history as to who did what. At the end of the day, we recognize from an agricultural perspective, that every time we've done a free trade agreement from NAFTA on through, it's been rebuffed by certain sectors of our society. But at the same time, there's irrefutable proof that every time we do a free trade agreement, agriculture gains exponentially. I know there are always concerns. I remember the discussions about the wine industry in Canada during the NAFTA discussions, but if you look at our wine industry now, it's stronger, it's better, and it's world class and winning awards, and so on.

We see that same type of model being applied even to our supply-managed sector, which doesn't export. It will have that ability with the CETA. It will have unlimited access to get dairy products and so on into that European market. We know we have some of the best in the world. It's a matter of working with industry to choose what strengthens them and building towards a future that includes the ability to trade in Europe. Certainly we'll work with the industry to strengthen them. But at the end of the day, as I say, there's irrefutable proof. Numbers don't lie when they show that agriculture gains exponentially with free trade, especially in a country as large as Canada where we have the land, the water, the ability to produce, the ingenuity of our producers, and so on.

[LaVar Payne, Conservative, Medicine Hat, AB]

I understand, Minister, that there's a new beef facility up around Calgary that is specifically targeting the European market. I wonder if you have any comments on that.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

It's targeting all markets around the world. As I've been saying to the livestock guys for years, we have to sell what our customer wants, not what we have. We have to learn to cut the beef. We have to learn how to package it, and so on, so it's prepped for their market. That's value-added.

We're shipping 16-ounce T-bone steaks into Japan. Those would feed a village, not just one person. They don't eat beef to the same extent we do, but there are so many more mouths to feed that of course that 16-ounce T-bone doesn't go very far.

[LaVar Payne, Conservative, Medicine Hat, AB]

Our colleague also talked about reinvestment of royalties. I wonder if you have any further comments you'd like to elaborate on regarding types of investments in terms of innovation here in Canada.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

The basic change we've made, Mr. Payne, is that we partner with industry now to make these investments. They are very much results-driven. The whole concept of science clusters, which we came up with through GF2, we began doing in the dying days of GF1. But in GF2 now, the money is allocated to the industries within parameters of the research they're looking for. AgCanada scientists, academia, and the private sector all come together to develop the result that industry is looking for. We're seeing a lot more work done and a lot more targeted work done on fusarium and problems that are out there as well as on some of these new investments in varietal research.

With the passage of Bill C-18, we've already seen some investments in Canada. Bayer CropScience has opened a new farm just outside of Saskatoon to develop some of these new varieties for use in western Canada, and they'll sell those and export them around the world. We'll also see work that Bayer has done around the world coming back to Canada when it comes to new and enhanced varieties.

We're seeing a whole different demand in western Canada when it comes to the grain sector and what's millable and trying to get a price point that's still millable. Warburtons is a huge flour mill just outside of London. I've had the great opportunity to sit down with them and talk about the changes to the Wheat Board. They were at the point where they were going to walk away because all the board would sell them was number one hard red. They didn't want that anymore. They wanted a variety of different grains. They actually wanted some new varieties that were available in Europe to be grown in Canada, something they couldn't do under the old Wheat Board.

I know one farmer in Saskatchewan who had 4,000 acres under contract with Warburtons this year on a wheat variety that's now available in Canada, simply because the board isn't there to say no, you can't do that. They're supplying it back to Warburtons to develop some of the new pastries, and so on, that they're putting out.

As I said, we have to be very cognizant of what customers want and start to develop our varieties and our livestock in that vein.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Payne.

Folks, we've come to the end of our first hour.

Minister, on behalf of the committee, I want to thank you for taking the time to come on the supplementaries. Obviously the questions often go a little beyond the supplementaries, but I believe your breadth of knowledge and understanding in the industry is recognized by everyone here. Thank you so much for coming.

We will break for a couple of minutes, and then we'll come back and meet with department officials.

Thank you.

[The Chair, Conservative, Bev Shipley]

We have some new folks who have joined us.

Welcome to each of you.

Just so that everyone knows who they are and their positions with the department, again, we have Greg Meredith, who is the assistant deputy minister, strategic policy branch; and Pierre Corriveau is the assistant deputy minister, corporate management branch.

Tina Namiesniowski is the assistant deputy minister for the programs branch; Siddika Mithani is the assistant deputy minister, science and technology branch; and Frédéric Seppey is acting assistant deputy minister, market and industry services branch.

Folks, we welcome you.

We do have until one o'clock, so I'm going to start back on the same rounds that we had in the first round. I have that list; at least I think I do.

Madam Brosseau, you have five minutes, please.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

I'd like to thank you for your presence here at the committee and for answering our questions. The departmental performance report from this year show a gap of about 645 full-time employees from what was originally planned for the department, making it a total reduction of about 1,200 employees since 2011.

There was also a budgeted amount of $63 million that wasn't spent. AAFC has closed several research stations across the country, including cereal research in Winnipeg, and farm rehabilitation offices in nine locations across Manitoba, Saskatchewan, and Alberta.

Can you explain the impact of these cuts? I think 1,200 employees is a lot and that this could negatively impact research across the country.

[The Chair, Conservative, Bev Shipley]

Who is that directed to?

Mr. Corriveau.

[Pierre Corriveau, Assistant Deputy Minister, Corporate Management Branch, Department of Agriculture and Agri-Food]

In terms of the numbers, as we mentioned before when we were here as part of the deficit reduction action plan, the department announced a significant reduction in its population of employees, and the numbers you are quoting are correct. In the draft, we had announced a reduction of about 600 employees.

In terms of funding that was lapsed last year, you have two items that are shown in the estimates today. They are in fact funds that we lapsed last year, but they're coming back to the reference level. I am on page 2-2 of the English version of the estimates, and there's an item of $41.6 million. These are funds that we lapsed last year that are coming back for approval to the committee today.

As well, an amount of $3 million for the Canadian Wheat Board is also shown here today for approval.

The department tries to maximize the use of its resources, but if funds do lapse, we have a mechanism in place, with the approval of the Treasury Board, to bring funds from the last fiscal year forward to the current fiscal year.

In terms of the closure of the Cereal Research Centre, I'll maybe just address the infrastructure side of it. That facility was in dire need of repairs. We have two other facilities in Manitoba, in Brandon, Manitoba, and in Morden. As such we made a facility infrastructure change that has allowed the co-location of the science aspect from Winnipeg to those areas. However, I will allow my colleague in STB to provide you with more details on the science perspective.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Thank you.

[Dr. Siddika Mithani, Assistant Deputy Minister, Science and Technology Branch, Department of Agriculture and Agri-Food]

Thank you very much.

I just want to go back to your question and the rationale for the decision to close a number of sites across Canada. Really, from a science perspective, it's being able to make the best use of our resources and being able to really create a critical mass of expertise in scientists focusing on certain areas so that the efficiency with which we spend the research dollars is maintained.

As my colleague Pierre Corriveau said, the science that was being done at the Cereal Research Centre was actually moved to either Morden or Brandon. In areas where scientists decided not to move, those positions were staffed and are in the process of being staffed. So that work still continues.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

So that work is still being continued, but just elsewhere. Okay.

We've also seen a 10% decrease of about $140 million in business risk management expenses from last year. Where have those cuts been concentrated and what has the impact been on producers?

[The Chair, Conservative, Bev Shipley]

Mr. Corriveau.

[Pierre Corriveau]

Again, I'll start with the numbers and then.... From a financial angle, you'll see that interest rates were lower and there were fewer disasters last year. Obviously the program is there if there's a need but obviously last year there wasn't a need. That's why you'll see the expenses at a lower level than in the previous year. I'll defer to my colleague, Tina, for more details.

[Tina Namiesniowski, Assistant Deputy Minister, Programs Branch, Department of Agriculture and Agri-Food]

Thank you, Pierre.

In response to that question, I think it's important to remind committee members that there is a difference between our business risk management programs and what I would refer to as our voted programs. With business risk management programs there are statutory obligations, and the government provisions a certain amount of funding on an annual basis, but they're demand driven. So it very much depends on the circumstances within the agriculture sector.

For example, in relation to disasters, we had less activity last year than we've had in previous years, so there would have been less of a demand on the AgriRecovery program. That holds true across all of our business risk management programs.

[The Chair, Conservative, Bev Shipley]

Go ahead.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Only 23,000 producers received cash advances on time by March 31, 2014, for the 2013-14 production period. That is 7,000 less than the goal of 30,000. Can you just tell us why these goals are not being achieved?

[Tina Namiesniowski]

Mr. Chairman, I'm not sure I understand the question. Is it in terms of the cash advances in relation to the advance payments program, or which program in particular?

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

The business risk management.

[Tina Namiesniowski]

We have a number of programs that fall under the broad heading of business risk management programs. There are programs that do provide cash advances, for example the advance payments program. That, again, is a demand-driven program and it depends on producers and their need to come forward and seek advances through that program.